President Bush and Federal Reserve Chairman Ben S. Bernanke on Thursday endorsed the idea of an economic stimulus package to boost the flagging economy, as Bush began discussions with congressional leaders on the next steps.

Bush plans to give a speech Friday outlining his principles for a stimulus package, according to the White House press office. Previously, Bush had been expected to wait until his Jan. 28 State of the Union address to lay out his ideas for spurring an economy rocked by a housing crisis, credit crunch, sky-high energy costs and rising unemployment.

Democratic leaders said they hoped to see a stimulus package enacted within a month, and deputy White House spokesman Tony Fratto said, “I see no obstacle to that.”

Although most of the congressional leaders who participated in a Thursday afternoon telephone conference call with Bush issued positive, upbeat predictions of cooperation on a stimulus package, Senate Majority Leader Harry Reid, D-Nev., clearly did not like the president’s plan to jump out front with a Friday speech.

“I am disappointed that he is rejecting a request from leaders of both parties and both chambers to work with us directly to develop a bipartisan package rather than unilaterally detailing his own approach without congressional input,” Reid said.” The president’s strategy threatens to unnecessarily politicize the inevitable bipartisan negotiations we will need to quickly enact legislation.”

Bernanke — who met with House Speaker Nancy Pelosi, D-Calif., on the topic earlier this week — voiced support Thursday for a temporary, targeted stimulus package. But he warned the House Budget Committee that it must be carefully crafted to avoid further destabilizing the economy.

“I agree that fiscal action could be helpful in principle, as fiscal and monetary stimulus together may provide broader support for the economy than monetary policy actions alone,” Bernanke said. “But the design and implementation of the fiscal program are critically important.”

The Fed is widely expected to do its part by reducing interest rates another half percentage point when its policy-making arm meets Jan. 29-30. The Fed has already cut rates a full percentage point to 4.25 percent since mid-September.

Bernanke said a stimulus package needs to be deployed quickly, so that its effect would be felt over the next 12 months. “Stimulus that comes too late will not help support economic activity in the near term, and it could be actively destabilizing if it comes at a time when growth is already improving,” he said.

Bernanke suggested a legislative package “that combines a number of elements might, in some sense, address the problem from a number of different angles [and] be more effective than one that was only a single element.”

But Bernanke steadfastly refused to endorse specific stimulus proposals, despite attempts by lawmakers to get him to comment on the desirability of boosting food stamp funding and extending unemployment insurance — favored by Democrats — compared with business tax relief favored by Republicans.

There was evidence to suggest that money targeted to low- and moderate-income people would be more likely to be spent in the short term, he said, though how to deliver such relief was up to Congress.

Bernanke also would not say whether the 2001 and 2003 Bush tax cuts now set to expire in 2010 should be extended, though he said certainty in tax law was helpful to taxpayers. “Just in the terms of the next few months, I think that the evidence suggests that measures that involve putting money in the hands of households and firms that will spend it in the near term will be more effective,” he said.

In a nod to deficit concerns, Bernanke said it would be counterproductive to increase taxes to pay for the stimulus package in the short term, but that future offsets could work. Whether to waive pay-as-you-go budget rules for an economic stimulus package will be an issue lawmakers will have to decide soon.

The White House made its position clear on the issue.

“Well, if you think about the stimulus, the idea is to put money into the economy, not take money out of the economy,” Fratto said at his midday news briefing.

“Bush and congressional leaders discussed the need for a stimulus package during a 40-minute afternoon conference call.

Pelosi, House Majority Leader Steny H. Hoyer, D-Md., Senate Majority Leader Reid, Senate Minority Leader Mitch McConnell, R-Ky., and House Minority Leader John A. Boehner, R-Ohio, took part in the call. Treasury Secretary Henry M. Paulson Jr. joined in for the administration.

Pelosi indicated it is less likely that Democrats will unveil their own stimulus plan next week, because they hope to cut a bipartisan deal with the White House. “It’s never been an issue about presenting a plan. It’s about working together to develop a plan. That’s what our goal has been, to find that common ground and develop the communications to do that. . . . That’s our hope,” she said,

Boehner said the economic stimulus package could total as much as $150 billion. “That’s where the overall size of the package [is] that’s been discussed here and at the White House is,’’ he told reporters. Earlier, Pelosi gave a rough estimate of $100 billion for the package.

Boehner also indicated Democrats and Republicans are both willing to compromise on what will be included in a package in the interest of moving quickly.

“Nobody needs to push anybody into any corners to make this more difficult,’’ he said.

While congressional support for stimulus legislation is broad, the specifics of the package remain to be decided. Democratic leaders have been calling for measures that meet the “Three t’s” test: timely, temporary and targeted to individuals and businesses that will quickly spend the money.

Members of both parties have expressed support for tax rebates, mentioning sums from $200 to $600. However, they must decide whether rebates should go only to those who pay income taxes or also to low-income workers who earn too little to pay income taxes but are subject to payroll taxes.

Democrats also would like to increase spending on food stamps and extending unemployment insurance, while Republicans want tax relief for businesses, such as “bonus depreciation,” which would boost the amount of capital expenditures a business could deduct in the first year, and raising the $125,000 limit on equipment purchases a small business could “expense” (deduct) in the year of purchase.

Sen. Arlen Specter, R-Pa., said in a news release that he plans to introduce a bill Jan. 22, the day the Senate reconvenes, to grant businesses bonus depreciation and increased expensing in 2008 and 2009.

Although some lawmakers, especially those who serve on the Transportation and Infrastructure Committee, have called for increased spending on roads, bridges and other infrastructure, House Financial Services Chairman Barney Frank, D-Mass., said it was “highly unlikely” that such funding would be included in a stimulus package. Economists say there is little immediate stimulative effect from spending on infrastructure projects, which take years to build. Frank said Democrats would likely make infrastructure funding an issue later this year.

Alan K. Ota contributed to this story.

First posted Jan. 17, 2008 11:16 a.m.